Friday 25 September 2009

ICE FCOJ Review: Lower Close Caps Weekly Sell-Off

Fri, Sep 25 2009, 18:09 GMT

ICE FCOJ Review: Lower Close Caps Weekly Sell-Off

KANSAS CITY (Dow Jones)--Frozen concentrated orange juice futures closed lower Friday, capping a week that saw a sharp sell-off in orange juice and the commodity sector as a whole.

Most active November orange juice lost 115 points to settle at 90.90 cents a pound.

For the week, November juice lost a staggering 1,290 points, or 12 3/4 cents a pound, bolstering the market's bearish mentality, both fundamentally and technically.

The market may have already wrung most of the sellers out of the market, however, with this week's decline, as prices approach fair value.

"I believe fair value is right around 95 cents a pound," said James Cordier, analyst and founder of

"We're close to a low and close to fair value and I just don't see the bottom falling out from under this thing," he said.

Prices could easily gravitate either above or below 95 cents until fresh news hits the market, he said.

Though bearish traders have pushed November juice down through all of its major moving averages, additional bear targets are in place at the 90-cent low from Sept. 15 and Sept. 11 low of 86.10 cents. Traders may sell the market down to near 80 cents a pound in the absence of bullish news, a broker said.

Fresh news could come in the form of threatening weather in the Atlantic Basin, though it has been a quiet tropical storm season so far. Traders have their eyes on a tropical disturbance in the eastern Atlantic, which National Hurricane Center forecasters say has a 30%-50% chance of developing into a tropical depression or storm. It is still too far away to be considered any kind of threat to Florida, a broker said.

Conditions further west in the Atlantic Ocean continue to be hostile for storm development, however, with wind shear effects in place, said Cordier.

Florida's orange crop continues to see favorable growing conditions, with scattered to widely scattered showers and thundershowers possible over the weekend. The oranges continue to be rated in good condition and the fruit is sizing well, state agriculture officials said.

The U.S. Agriculture Department will issue its initial projection for the 2009-10 Florida orange crop on Oct. 9. Traders have pegged the crop in a wide range of 140 million boxes up to 154 million 90-pound boxes. The 2008-09 crop totaled 162 million boxes.

Open interest fell 157 to total 29,160 contracts, ICE data showed.

Futures volume was estimated at 874 contracts, with 125 calls and two put options traded.

ICE Settle Change Range (At time of settlement)
Nov $0.9090 dn 115 $0.9040-$0.9115
Jan $0.9440 dn 115 $0.9390-$0.9445

-By Tom Sellen, Dow Jones Newswires; 913-322-5177;

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(END) Dow Jones Newswires

September 25, 2009 14:09 ET (18:09 GMT)

Copyright 2009 Dow Jones & Company, Inc.

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